Before the recession put a stranglehold on most every investment, clean technology was hot. Nearly 80 percent of all the venture capital spent in 2008 went to clean, green investments. The industries slumped for much of 2009, but now investors are returning to clean industries.

Regular Americans are curious about these clean tech companies, too, and they’re asking their financial advisers about them, according to one survey.

What is clean tech? It refers to technologies made without generating significant pollution, which produce products that can replace non-renewable energy sources, like oil, and make us more energy-efficient. Think solar cells and wind-generated power, hybrid or electric cars, green buildings, desalinated water and a “smart grid” that will help businesses and home owners to connect with new sources of power, like wind farms and giant desert photovoltaic installations

To give it an extra push, the government’s stimulus package has set aside about  $100 billion for clean, green products and industries. With that boost, venture capital is starting to flow again.

Considering clean-tech investing? We asked some of the best minds in the business to offer tips, advice and bits of wisdom:

Dallas Kachan Cleantech Group

What parts of clean tech are rebounding?

“The earliest sectors to rebound are tied to energy-efficiency and smart grids. The technologies are well understood and simple, quick and easy to deploy. Energy efficiency technologies are the low-hanging fruit,” said Dallas Kachan, managing director of Cleantech Group.  “By becoming more efficient we negate the need for more (energy) generation. . . there is a broad realization that over the last year you get high returns to pursue energy efficiency.”

Kachan’s company is among the most widely read sources of trade news, daily business and developments in the clean technology arena.

So far, solar deals and biofuels have gotten the lion’s share of clean tech investments. Some predict now that energy-efficient technologies will be the next hot commodities.

Are these industries solid?

“These technologies are ready for prime time. They weren’t ready 30 years ago. The timing wasn’t right in the ‘70s. They are no longer considered “alternative” technologies,” said Ron Pernick, co-founder of Clean Edge, a major market research and publishing firm focused on clean technologies since 2000. Clean Edge guides companies, investors and even governments with information about “trends, opportunities and challenges.”

“Globally, biofuels, wind and solar were a $116 billion industry last year,” Pernick said. The predictions for those three sectors? “They will be more than $300 billion in a decade.”

Now, big businesses are stepping into the clean-tech arena, Pernick said. Reports say that General Electric has sunk billions of dollars into wind power, and Applied Materials has put money into solar power.  Xerox, Kimberly-Clark and Walmart  are all putting substantial money into clean tech.

How quickly will these clean tech businesses grow?

Michael Kanellos Greentech Media

“Don’t expect a quick payoff,” said Michael Kanellos, editor-in-chief of Greentech Media, a leading online-media company. He suggested lowering your sky-high expectations. “Software companies can take off like a rocket because consumers can download applications for free and good ones travel by word of mouth. Twitter went from a few users to millions.

“But most green-tech applications – like energy-efficient appliances or solar panels – have to be manufactured. That costs money, which slows adoption,” he said.

In other words, “If Google had to go on your roof, install a bunch of glass plates and charge you $20,000 before you even started searching, you’d switch to Yahoo,” Kanellos said.

What about green mutual funds?

There may be safety in numbers, and clean/green mutual funds could provide extra comfort for mom-and-pop investors. Morningstar provides its members with research and analysis of the market, including tracking of 23 actively managed (and 15 exchange-traded) funds that are considered “green.”

“Somebody who wants to invest in green mutual funds should be aware of the various types of funds out there that are marketed as ‘green,’ said David Kathman, a Chicago-based analyst of mutual funds for Morningstar. A fund that consists of many start-ups is a riskier bet than one with a broader mix.

“Another group is ‘best of breed’ green funds, he said. “These look much more like regular core mutual funds in that they typically own well-known stocks, but within each sector they look for stocks with the best green profiles and environmental records,” Kathman said.

If you’re thinking about a mutual fund, study the prospectus for their “green” criteria or sustainability goals and the areas of green industry where they focus.

Like any other investment, looking for solid cash flows, stimulus money and diversified portfolios are important. A solid track record is as important with “clean” mutual funds as it is with any other fund.

Don’t just think American. Think globally

“Clean tech is not just an American phenomenon. There are very important deals and commercialization in . . . China and the Middle East,” said Clean Tech’s Kachan.

The clean-tech field also is making strong headway in South Korea, Japan, the European Union and India. “Governments around the world . . . are looking to create jobs, be energy-independent, meet stringent requirements for carbon and other emissions, said Clean Edge’s Pernick. “Governments are taking this seriously.”

In the third quarter of this year, Europe received much more clean-tech financing than America.

China is the world’s third largest economy, and they are aggressively looking for cleaner, more efficient energy. One report points out that China has doubled its ability to use wind-generated power over the past four years.

There’s a nice symmetry to this green trend that’s taken root among financial institutions. Aware that their paper-spewing tendencies carry a high carbon price (not to mention their actual price), many banks and credit companies are planting trees for customers who agree to forgo paper statements.

The latest to announce such a tree-planting project is the Kinecta Federal Credit Union in Manhattan Beach, Calif. Kinecta will make a donation to plant a tree in the Brazilian Rain Forest for every customer who converts to electronic statements between now and Sept. 30.

“Our intention is not only to show our commitment to being a green organization, but also to motivate our members to consider the positive global impact even the smallest decision can have,” said Shannon Doiron, Director of Marketing & eCommerce in a news release. “Collectively, credit union members can make a tremendous difference simply by opting out of paper statements.”

The LA-area credit union hopes to plant 1,000 trees through the Nature Conservancy, which will put the plan into action.

Electronic statements save banks money — an estimated $12 to $17 annually per customer, according to the Arbor Day Foundation, which partners with institutions to handle the tree plantings.

And that savings can benefit customers, especially when credit unions or member-owned investment groups are involved. (Kinecta has 225,000 members to whom the savings can accrue.)

As important to environmentalists, and increasingly so to businesses, reeling in the paper trail can significantly reduce the company’s carbon footprint. Trees help clean the air and save habitat for wildlife, stacking up positive points for a company inventorying its environmental impact; by contrast, paper statements are resource intensive.

Other financial and retail organizations that have planted trees to encourage paperless statements include:

• Bank of America, Sovereign Bank, AT&T, T Mobile, Mary Kay and Allstate have all partnered with the Arbor Day Foundation at various times in the past two years during paperless promotions that reward customers with tree plantings.
• HSBC in the United Kingdom created an online virtual forest to depict the real tree planting going on as customers moved online, though their initial proposition was not one-for-one — the going gold standard today.
• Bank of New York Mellon, Bank of America and Allstate have partnered with the Nature Conservancy to plant trees in exchange for customers going paperless.

SustainableBusiness.com has released its 8th annual list of 20 public companies that are leading the way to a sustainable economy. The selections are made in cooperation with a group of judges consisting of leading green stock analysts.

Judges select companies across the range of green business sectors: solar, wind, geothermal, smart grid, water, food, agriculture, green building and transport. SustainableBusiness.com said a third of the companies populating this year’s list are “corporate pioneers” — companies with conventional products and services that are greening their product lines.

Here is the 2009 SB20 list:
(Company Name — Ticker — Sector — Country)

1. First Solar — Nasdaq: FSLR — Solar — USA
2. Vestas — VWS.CO; VWDRY.PK — Wind — Denmark
3. Gamesa — GAM.MC; GCTAF.PK — Wind — Spain
4. Ormat — NYSE: ORA — Geothermal — USA/Israel
5. WaterFurnace — WFI.TO; WFIFF.PK — Geothermal — USA
6. Telvent Git, SA. — Nasdaq: TLVT — Smart Grid — Spain
7. Novozymes — NZYM.CO; NVZMY.PK — Industrial/Ethanol — Denmark
8. Westport Innovations — Nasdaq: WPRT; WPT.TO — Transport — Canada
9. Pure Technologies — PUR.V — Water — Canada
10. Chipotle Mexican Grill — NYSE: CMG — Corporate Pioneer/Food — USA
11. Naturex SA — NRX.PA — Food — France
12. United Natural — Nasdaq: UNFI — Food — USA
13. Plant Health Care — PHC.L; PLHCF.PK — Agriculture — UK
14. Bendigo and Adelaide Bank — BEN.ASX — Corporate Pioneer/Finance — Australia
15. Novo Nordisk — NYSE: NVO — Corporate Pioneer/Pharmaceuticals — Denmark
16. Google — Nasdaq: GOOG –Corporate Pioneer/Technology — USA
17. IBM — NYSE: IBM — Corporate Pioneer/Technology — USA
18. Herman Miller — Nasdaq: MLHR — Corporate Pioneer/Green Building — USA
19. Philips — NYSE: PHG — Corporate Pioneer/Green Building — Netherlands
20. Timberland — NYSE: TBL — Corporate Pioneer/Apparel — USA

San Francisco-based Wells Fargo & Company announced today that it has financed 125 commercial-scale solar photovoltaic projects since late 2007. The bank said the projects are in 10 states total 43 megawatts of capacity — enough to power the equivalent of 6,000 homes.

One recent project was a 450-kilowatt system, developed, installed and operated by SunEdison, on a Staples’ distribution center in southern California. The project’s 1,960 solar panels cover most of the building’s 330,000 square foot roof.

“We’re able to purchase solar energy generated on our rooftop at a rate below the cost of electricity from the grid,” Mark Buckley, VP of Environmental Affairs at Staples, Inc., said in a statement. “This reduces our operating costs and helps the environment.”

Wells Fargo said it provided $250 million in equity capital to solar photovoltaic projects developed by solar energy providers SunEdison and MMA Renewable Ventures.

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